EDITORIAL: Will veto benefit the Cow Palace? (San Francisco Examiner)
Sunday, October 05, 2008

SAN FRANCISCO – Working through the 1,100-plus bills on his desk after the current legislative session, Gov. Arnold Schwarzenegger vetoed a bill late Tuesday ordering the Department of General Services to negotiate the sale of a 13-acre Cow Palace overflow parking lot, with the Daly City Redevelopment Agency having right of first refusal.

State Sen. Leland Yee’s Senate Bill 1527 was meant to help revitalize Daly City’s isolated, lower-income Bayshore neighborhood, which has long been without much-needed services as basic as a supermarket, bank, medical clinic, post office and new elementary school. After years of Daly City being stonewalled in negotiations with the Cow Palace board, city officials called upon Yee, their district legislator, to introduce a bill requiring the sale of the entire 68-acre arena site for replacement by an ambitious mixed-use development.

While the state-owned Cow Palace has lost more than $1 million during the last five years, promoters of long-established annual events, including the Grand National Rodeo, the Golden Gate Dog Show, the San Francisco Flower & Garden Show and Disney on Ice put heavy pressure to keep the 67-year-old facility open. Yee beat a forced retreat to the smaller 13-acre parking lot sale proposal.

Schwarzenegger provided some reasonable objections in his brief veto message, noting that SB 1527 would bypass California’s competitive bid process and potentially limit the state’s financial return for selling its land. Also, Daly City’s right of first refusal narrowed options for use of the property.

However, Daly City’s defeat may ultimately not sting as badly as it might seem. Two weeks ago, the Cow Palace entered into exclusive lease negotiations with developer Cypress Equities for a 60-year rental of the same 13 acres. If and when a final deal is reached, the Bayshore will get its neighborhood grocery store and other basic amenities at last.

Still, Daly City had hoped for a three-times-larger commercial site. It envisioned a 37-acre project created by combining the parking lot with two adjacent city-owned lots. City Manager Pat Martell also questioned whether Cow Palace management would be able to complete the project during today’s economic downturn without the advantage of city redevelopment money.

Martell and Yee both suggested that the $1 million or so the Cow Palace earned each year from its smaller lease site paled in comparison to the roughly $20 million it could have quickly obtained by selling. Brand-new interim Cow Palace CEO Michael Wegher insisted the lease deal could go through, and having long-term revenue without giving up the state property was in everybody’s best interest.

The Examiner suspects Yee is on the right track in claiming that his bill “forced the Cow Palace board to finally help the neighborhood.” And we will be quick to call a foul if the lease negotiations somehow fade away without successful agreement.